Retailers Voice Strong Support For Central American Pact

June 1, 2005

Claiming that the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) will help US
and regional textile and apparel manufacturers adjust to the new competitive environment of the
post-quota world, the head of the National Retail Federation (NRF) is urging the US Trade
Representative and Congress to move swiftly and approve the agreement. Under procedures for trade
agreements, the USTR must submit specific language implementing the agreement that must be voted up
or down and cannot be amended by Congress. The Senate Finance Committee is expected to meet June 14
to work out details of implementing legislation, and the House Ways and Means Committee is expected
to do the same shortly thereafter. Tracy Mullin, president of the National Retail Federation, said
the Central American agreement will help reduce prices for US consumers and create opportunities
for US retailers to open stores in the Dominican Republic and Central America. She said it also
will help build partnerships between US and regional textile and apparel manufacturers.She said the
pact would help eliminate some problems retailers see with the strict textile rules of origin now
in effect in much of the area. An NRF statement noted that under current trade law, apparel from
the region can qualify for duty-free treatment to the United States only if it is made of US fabric
woven from US yarn. DR-CAFTA would expand duty-free treatment to cover a wider range of products
and would allow those products to be made of fabric produced in the region along with fabric from
Canada and Mexico.